iPhone X Supply Revised Lower Yet Again as TrueDepth System Still Faces Production Issues

A new report today yet again suggests that customers looking to get an iPhone X this year might face quite the challenge.


Jeff Pu, an analyst with Taipei-based Yuanta Investment Consulting, has cut his forecast of the number of iPhone X devices that will be produced this year from 40 million units to 36 million. It's the second time he has revised down his estimate, which originally totaled 45 million earlier this year.

The underlying reason is that Apple's suppliers are still struggling to perfect manufacturing of the iPhone X's TrueDepth camera and 3D facial recognition system, according to Japan's Nikkei Asian Review. We first heard about the production issues from KGI Securities analyst Ming-Chi Kuo a few weeks ago.

Multiple reports have claimed it has taken more time to assemble the TrueDepth system's so-called "Romeo" module than the "Juliet" module.

The "Romeo" module reportedly includes the dot projector that beams more than 30,000 invisible dots to create a precise depth map of your face, while the "Juliet" module includes the infrared camera that analyzes the pattern. Together, they help power new iPhone X features such as Face ID and Animoji.

Pu maintained his belief that the iPhone X will enter mass production in mid-October and begin to be shipped from China to the first wave of launch countries next week. iPhone X pre-orders begin Friday, October 27, just over two weeks from now. The device officially launches Friday, November 3.

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Himax Begins Shipping Wafer-Level Optics Technology for iPhone X’s Face ID

Fabless semiconductor company Himax Technologies has begun shipments of chips based on wafer-level optics (WLO) technology to Apple, according to industry sources (via DigiTimes). The solution is reportedly a key component of the Face ID facial authentication sensor exclusive to the upcoming iPhone X.

ChipMOS Technologies will also see revenues generated from orders for WLO chips increase substantially later in 2017 as the backend house has cut into the supply chain for the iPhone X by partnering with Himax, said the sources. ChipMOS' revenues from orders for WLO chips are expected to reach between NT$50 million (US$1.66 million) and NT$60 million, up from the current NT$20-30 million, the sources indicated.
Apart from Apple's demand for the WLO chips, HiMax and its backend partner ChipMOS are gearing up for a busy 2018, with Android phone makers expected to follow Apple's lead by bringing facial recognition features to their own devices.

According to a recent research note by KGI Securities analyst Ming-Chi Kuo, Apple has tilted interest in the mobile industry away from under-display fingerprint recognition, and instead towards camera-based 3D sensing technologies as the ideal user authentication solution. Kuo believes the next two to three years will see shipments of 3D sensor-equipped Android devices to exceed those with under-display fingerprint recognition by a factor of two or three or more.

In line with Kuo's analysis, industry sources claim Qualcomm's recently announced 3D depth-sensing solution, jointly developed with Himax, is directly targeted at orders from the Android camp, with solutions from Orbbec and Mantis Vision also jostling to business. Himax and ChipMOS declined to comment on specific customers and orders.

In related news, supply chain sources speculate that Apple may delay iPhone X shipments otherwise the supply of the device could be limited this year due to yield problems with key components for new features that require 3D sensing modules. Apple is allegedly waiting to see how many iPhone X pre-orders it receives, and monitoring how well the already-released iPhone 8 and iPhone 8 Plus sell, before fully ramping up production overseas.

A report last month claimed Apple's suppliers are shipping only about 40 percent of the components originally planned for initial production of the iPhone X, with Kuo subsequently claiming the 3D sensing components used in the TrueDepth camera, which represents a far more complex structure than those of rivals, may be the main production bottleneck.

Kuo said shipments of iPhone X components will likely ramp up in mid to late October. Given pre-orders begin October 27, with in-store availability starting November 3, all signs point towards the iPhone X being in extremely short supply.

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Apple’s Face ID Turns Android Makers Away From Under-Screen Fingerprint Recognition

With its iPhone X debut and the introduction of Face ID, Apple has now tilted interest in the mobile industry away from under-display fingerprint recognition towards camera-based 3D sensing technologies as the ideal user authentication solution. That's according to the latest research note from respected KGI securities analyst Ming-Chi Kuo.

According to the new note seen by MacRumors, inquiries by Android smartphone vendors into 3D-sensing technologies have at least tripled since Apple unveiled its TrueDepth camera and Face ID technology, which replaces traditional Touch ID fingerprint recognition in the iPhone X, set to launch in November.

While under-display optical fingerprint recognition is only a spec upgrade from capacitive solutions, 3D sensing embodies a revolutionary user experience and warrants a premium on gross margin. 3D sensing not only enables facial recognition in security applications and allows users to create fun expressions like Apple's Animoji, on a more important level, it is a key factor in the development of AR. We therefore believe brand vendors are willing to spend more for related components.
Currently, the solutions available to Android phone vendors are said to be from Qualcomm and Himax, Orbbec, and Mantis Vision, with the more mature Qualcomm-Himax solutions attracting the most attention.

Kuo went on to say he believes the next two to three years will see shipments of 3D sensor-equipped Android devices to exceed those with under-display fingerprint recognition by a factor of two or three or more. This will be mainly due to 3D-sensing's wider compatibility with LCD screens than under-display optical fingerprint recognition, which is exclusive to OLED panels, said Kuo.

The KGI analyst also believes Samsung's continual dominance of the high-end OLED panel market over the next two to three years will mean shipments of under-display optical fingerprint recognition will remain significantly capped.

Regular MacRumors readers may recall that some reports claimed Apple struggled to implement under-display fingerprint recognition for its most advanced iPhone to date and instead opted for facial recognition as the exclusive authentication method as a result. In retrospect however, Kuo accurately contradicted that report shortly after it appeared, while well-connected Apple journalist John Gruber has also cast doubt on the assertion that Touch ID had been planned for iPhone X, claiming Apple had been "all-in" on replacing Touch ID with Face ID for over a year.

In an earlier report, Kuo said he believes it will take Apple's Android competitors up to two and a half years to replicate the functionality and user experience of the TrueDepth Camera in the iPhone X. He has also previously said that should Apple's TrueDepth camera prove to be popular with consumers, all of the company's future iPhones are likely to adopt the feature.

Face ID will become available to the public starting on November 3, the official launch date for the iPhone X.

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TrueDepth Camera System is Primary Reason for Slow iPhone X Production

Following a report claiming Apple's suppliers are shipping only about 40 percent of the components originally planned for initial production of the iPhone X, a new report suggests the TrueDepth camera is the primary bottleneck.


The word comes from KGI Securities analyst Ming-Chi Kuo, who said the facial recognition system is "far more complex" than those on competing devices, which is making it challenging for Apple to achieve mass production.

An excerpt from Kuo's research note obtained by MacRumors:
TrueDepth camera may be main production bottleneck of iPhone X ramp. The 3D sensing (TrueDepth camera) on iPhone X is composed of a structured-light system, time-of-flight system and a front-facing camera, which represents a far more complex structure than those of rivals. It will therefore be harder to achieve mass production. While we project iPhone X will see output ramp up meaningfully in mid/ late October, tight supply may only start to ease in 1H18F due to strong demand.
Kuo said shipments of iPhone X components will likely ramp up in mid to late October. Given pre-orders begin October 27, with in-store availability starting November 3, all signs point towards the iPhone X being in extremely short supply.

Kuo believes iPhone X pre-orders have the potential to exceed 40-50 million units, so it's clear the device won't achieve supply-chain balance for quite awhile.

Related Roundup: iPhone X
Tags: KGI Securities, Ming-Chi Kuo, TrueDepth

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